Monday, March 14, 2011

A Chinese businessman, Sam Pa, is casting a long and warped shadow over Zimbabwe as it heads towards what many fear will be violent elections later this year.

ENIGMATIC: A rare photograph of Sam Pa who has allegedly been underwriting operations to influence the outcome of polls in favour of Zanu-PF

" 'No other foreign businessman in Zimbabwe has such enormous influence' "

He has been identified as the financier of a covert operation whose purpose is to sustain President Robert Mugabe's regime.

The details of the deal that this mysterious Hong Kong-based magnate has cut with Mugabe's national intelligence chief, Happyton Bonyongwe, have not been disclosed officially and officials loyal to Mugabe and Bonyongwe deny any connection.

International researchers into his opaque business activities have noted a similarity with his wheeler-dealing in other African countries, where companies he represents are alleged to have manipulated networks within the elites and used closed-door negotiations to secure a large stake in strategic mineral resources.

Oil-rich Angola, a rising economic power in Africa and the main source of China's oil, was a prime example. He has also invested heavily in mineral-rich Guinea and Tanzania. Madagascar since the coup has been another focus of attention. Now it looks as if Zimbabwe is falling under the spell of this canny Chinese investor.

Pa conducts his business largely under the radar, keeps his name and face out of the headlines and is said to use a variety of different identities and nationalities which he changes with nonchalant ease depending on the country and situation he is in.

In the case of Angola, the relationship was built up by key figures in the presidency and intelligence services and is now controlled by General Helder Vieira Dias. Dias, known as ''Kopelipa", is the most powerful man in the country after president Jose Eduardo dos Santos.

The courtship clinched billions of dollars of oil and infrastructure contracts for the Chinese and Angolan companies Pa's name is associated with. Although he uses a profusion of aliases Pa's special standing has enabled him to travel by private executive jet on an Angolan diplomatic passport whenever he wants.

In Zimbabwe, elements of the Bonyongwe deal have now begun to emerge and it fits his pattern of drawing members of a country's elite into lucrative joint ventures so that, over time, he becomes indispensable to them.

Some disillusioned intelligence officers and party officials, unhappy at the way the country's valuable mineral resources are being traded away for personal and electoral gain, have released what they know is happening.

They allege that in return for diamonds and mineral resources to supply China's booming economy Pa has provided funds and equipment to Bonyongwe's Central Intelligence Organisation (CIO) to enable it to deliver an electoral victory for Mugabe and his party.

Opponents of Mugabe and the many Zimbabweans wanting free and fair elections and democratic and accountable government will find it disturbing to learn that a secretive Chinese businessman, who schemed his way into Mugabe's inner circle, has allegedly been underwriting operations to influence the outcome of polls in favour of Zanu-PF.

The ramifications of Pa's secret funding of the CIO are already beginning to be felt, the sources said. The money is being used to train and deploy militias who are harassing and intimidating people amid a sudden surge in political violence

"We all know that Zanu--PF does not have even a ghost of a hope of winning a free and fair election," said political analyst, John Makumbe, a longtime Mugabe critic. Makumbe said it was therefore "obvious" that the former liberation movement intends to resort to indiscriminate political violence to cow people into voting for Mugabe and his party which could spell a return to single-party dictatorship.

Pa has also ploughed money into vehicles for the CIO, providing the intelligence service with more than 100 Nissan pickup trucks, so increasing its operational capability against the regime's opponents, the sources said. He was also involved in funding a CIO hearts and minds programme and Mugabe's anti-sanctions campaign against Western governments headed by Britain and the United States which have hit Mugabe and key regime figures with a travel ban and asset freezes.

He has underwritten a seed and fertiliser inputs programme to win over the large farming vote which is vital for a Zanu-PF victory. Most striking, the sources alleged that in early 2010, he had offered to match the salaries of the entire staff of the CIO, the police and the armed forces to ensure their loyalty to the Zanu-PF cause.

There is no evidence that the money has been paid and the low salaries continue to cause resentment in the services.

Subsequently, they said Bonyongwe, himself, had proposed that the CIO should pay off all the party's debts.

The intelligence chief's suggestion caused concern in the upper echelons of Zanu-PF as questions were asked about where and how the CIO had got its hands on so much money.

The unease was not dispelled when it was revealed that Pa was behind the funding and was in a commercial relationship with Bonyongwe, the sources said. It was believed that the Chinese businessman was to be the beneficiary of lucrative diamond concessions in the Marange diamond fields negotiated by Bonyongwe. The intelligence chief used his position to intimidate local companies to sell assets to Pa at knock-down prices.

Marange is home to one of the world's richest diamond deposits. Experts say it could make anywhere in the region of $75-billion to $200-billion in the next 50 years if exploited properly. But the industry is riddled with corruption and mismanagement.

The finance minister Tendai Biti complained recently that his treasury has received almost no diamond-based revenue at all. Millions of dollars' worth of diamonds remain unaccounted for and have been smuggled abroad. Renegade CIO sources said that Pa himself "is part of the grand plan to use Marange diamonds to prop up the regime".

The sources alleged that, using different aliases, Pa had flown out of Harare and military airbases last year with about 60000 carats of gem-grade diamonds and 69kg of industrial diamonds.

Crucial to Pa's special relationship with Bonyongwe and the CIO, the sources said, was the creation of the joint-venture Sino Zim Development. Backed by Bonyongwe it was awarded its own diamond concession at Marange. Last year, Sino Zim ranked top of five bids for concessions which Zanu-PF classified as "special national interest projects". The joint venture came ahead of even a Chinese government bid backed by General Constantine Chiwenga, the Defence Force Chief and other bids which Zimbabwean ministers and vested interests had supported. This issue continues to irritate Bonyongwe's rivals at the top of the regime. But, the sources said, it was too late to undo. Pa has made himself too important to Zanu-PF for anyone to act except Mugabe as the party readies for elections. But shunned by the West, Mugabe applauds and relies on China for political and economic support.

"No other foreign businessman in Zimbabwe has such enormous influence," said one CIO officer familiar with the Pa dossier. "Pa has burrowed into the very heart of the regime. ''

It was in 2008 that Pa was first introduced to Bonyongwe and realised that he was a man he could do business with. The introduction was made by the head of the Tanzanian intelligence service, CIO sources said.

Zimbabwe, for all its great economic potential, was in a mess. It had just gone through flawed and violent elections. There were food shortages, services were at a standstill and the economy was in ruins - the kind of chaos a shrewd businessman could exploit.

Nearly three years later Zimbabwe is an important component of a vast, controversial and opaque business empire.

At its core is the China International Fund (CIF) which heads a network of more than 20 associated companies.

It occupies a building at 88 Queensway in the heart of the Hong Kong business district. Also pivotal to the structure is China Sonangol, CIF's joint venture with Sonangol, Angola's national oil company and main cash cow. Although Pa has no official position in the companies and remains anonymous, in that his name does not appear on any company documents, he has been identified as the deal-maker time and again.

Typical was CIF's $7-billion deal with Guinea's former military dictatorship which gave the fund the right to develop the country's mining, oil, gas and infrastructure projects. It was there that this rare photograph of Pa was taken (above). International human rights organisations criticised the deal, saying it showed China was willing to deal with countries with poor human rights records to secure their mineral wealth for itself.

China Sonangol has snapped up several prime Harare properties including luxury lodges and Livingstone House.

The CIO occupies one floor. When in town Pa stays at a beautiful lodge bought from a Dutch woman, where he has held parties for his CIO friends. The staff has been provided with CIO cars.

The CIO sources said they always assumed that Pa had Chinese intelligence connections.

In 2009, a US congressional commission published a scathing report about the 88 Queensway Group. It said its lack of transparency and public accountability was a "major concern" for the United States as it acquired assets globally by stealth. It implied strongly that CIF could be falsely representing itself as a private business when it was actually an arm of the intelligence and public security services out to increase China's influence and guarantee the supply of oil and raw materials from Africa to fuel its runaway economy.

The researchers said they could find no paper trail for Pa. His name was not on any company documents and he held no official positions, nor shareholding. He was an enigma. They were not sure Sam Pa was his real name, but whoever he really was they regarded him as "very important".

"The Sam Pa connection was the most elusive," one of the writers of the report recalled. "All our research was based on finding concrete documents and paper trails but he stayed essentially clean."

Chinese experts said it was not entirely uncommon for leaders of Chinese businesses to operate behind the scenes, even nominating their wives to front their companies. This was especially true when the People's Liberation Army privatised its vast business empire in the 1990s.

On one of Pa's recent visits to Zimbabwe he was accompanied by a Chinese woman called Veronica Fung, who is a director of at least 24 companies, including CIF and China Sonangol. It is thought she is Pa's wife.

The Chinese experts speculated that there could be another explanation why Pa was so hard to identify: perhaps he was a "princeling", the son of a well-connected original Chinese communist revolutionary.

"It is almost impossible to research on them, not even Chinese dissidents will touch it," said a researcher.

''But they are extremely well-connected and they are extremely organised. It is also well recognised as a problem that exists. That is obviously a possibility. How else would these companies obtain financing of billions of dollars for projects?"

A Hong Kong magazine claimed that CIF was really controlled by a Chinese man who went by various names, including Samo Xu.

Adding to the puzzle, the American congressional report said Sam Pa was possibly the businessman controlling the multibillion-dollar Chinese oil and infrastructure projects in Angola who had been identified as Xu Jinghua, but who was known to have several aliases, including Sam King.

"Xu may also refer to himself as Sam Pa or Sampa," the report said. Hong Kong sources said Pa had used the name Sam King in the 1990s when he traded guns for diamonds during the Angolan civil war.

Whoever he really he is, with this confusion of identities, it is clear that the influence of this elusive Chinese businessman in Africa is enormous.

The Chinese foreign ministry has put out several statements distancing itself from some of Pa's business dealings.

In Zimbabwe, the Chinese ambassador Xin Shunkang has also warned the government to be cautious, saying his government has no connection with China Sonangol and, by implication, Pa.

Sources said Mugabe has started to harbour reservations as signs emerged that Pa cannot deliver all that he undertook.

Pa's long-promised deal on delivery of two Airbus 340s for Air Zimbabwe from Germany fell through at the beginning of the year. But with elections in the air the regime still depends on him.

It may be that Bonyongwe will come to regret the association. For the moment, though, the Mugabe regime depends too much on this arch-manipulator with his multiple personalities and mysterious, unexplained, connections to let him go.